# Concepts

**Lending and eTokens**

Users lend assets like ETH, USDC, or DAI on XLend.

In return, they receive **eTokens**, which represent their stake in the pool and accrue interest over time. eTokens can be transferred or traded.

**Borrowing**

Users can borrow assets by using their deposits as collateral. The **Loan-to-Value (LTV)** ratio determines how much can be borrowed against the collateral.

**Health Factor**

Liquidators monitor the **health factor** of each user’s position, which reflects the ratio of collateral to borrowed funds. If the health factor falls below a certain threshold, the position becomes at risk of liquidation. 

**Liquidation**

If the collateral value drops too much, liquidators can buy the collateral at a discount to repay the loan. This helps keep the protocol solvent. 

**Advanced Features**

* **eMode (Efficiency Mode)**: Allows borrowers to increase borrowing power when collateral and borrow assets are closely correlated (e.g., stablecoins).
* **Isolation Mode**: Limits borrowing when new or volatile assets are used as collateral to reduce risk. [Read more](https://docs.extrafi.io/extrafi-xlend/borrow-lend/isolation-mode).
* **Supply and Borrow Caps**: Caps ensure that the protocol isn’t overly exposed to any single asset.